The roughly USD 10 million being made available for the 2007-2011 period will be financed from the framework credit for economic cooperation and development of the State Secretariat for Economic Affairs (SECO).

SECO played an active role in the creation of the FIRST Initiative in 2002. Switzerland contributed CHF 14 million of the total USD 61.6 million raised for stage one. The aim of this multilateral initiative is to help the financial sectors of emerging, transitional and developing countries to improve their performance and stability.

"Financial crises such as those that occurred in Asia in 1997 and 1998 are costly for the national economies involved. A fall in gross domestic product (GDP) of between 15 and 20 per cent is not uncommon," SECO stated.

"Experience shows that it is poorest elements of the societies concerned that suffer most in such cases, as they have no resources of their own and no social security system to fall back on. The creation of a stable financial system able to function efficiently is important both to get the economy growing again and for efforts to combat poverty."

The FIRST Initiative offers countries with low-to-medium income levels the technical assistance needed to monitor and regulate their financial markets. Some 220 projects have already been implemented. The Initiative helps these nations to close serious loopholes in their laws and regulations, in combating money laundering for example. It also helps to strengthen the main pillars of the financial system, including at the level of the regulatory authorities. These efforts also benefit the developed world by reducing financial irregularities locally before they can have a global impact.

"As a major creditor nation with an internationally active financial sector, it is clearly in Switzerland's interest to promote stable, efficient and effective framework conditions, notably in the emerging, transitional and developing countries," SECO added.

The FIRST Initiative is based on the recommendations of the Financial Sector Assessment Programs (FSAP), which are being implemented on a voluntary basis by the International Monetary Fund and the World Bank, and which have the support of Switzerland. The Confederation has already participated twice in the past in an FSAP, in 2001 and 2007.

The University of St. Gallen in Switzerland confirmed the effectiveness and efficiency of the FIRST Initiative in the evaluation it carried out in 2006. The Trust Fund is administered by the World Bank. As well as being provided by SECO, funds are made available by the British Department for International Development (DFID), the Canadian International Development Agency (CIDA), the Foreign Ministry of the Netherlands, the World Bank and the International Monetary Fund.